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> Posted by Joy Kim, Financial Inclusion Analyst, MIX
Figure 1 (click to enlarge)
Today we launched the Senegal Financial Inclusion Workbook 2.0. Since its first iteration in 2013, MIX added a significant number of additional datasets at a more granular level: The total number of financial access points amassed increased from 1,903 to 10,155. Most of the datasets can now be inspected at the commune level, an important change from the initial workbook where the datasets were only displayed at the region level. In addition, we were able to map microfinance correspondents that did not exist back in 2013.
Senegal Makes Significant Progress in a Few Short Years
Since March 2012, when Senegal’s Ministry of Economics and Finance signed the Maya Declaration, it has introduced greater regulatory oversight of the microfinance industry. At the same time, the agency has helped create an enabling environment for the provision of digital financial services. Efforts to improve data and measurement, consumer protection, and implementation of a national financial inclusion strategy are ongoing. As a first step in implementing a national financial inclusion strategy, the Microfinance Branch (DMF) of the Senegalese Ministry in charge of Microfinance and Solidarity together with the National Agency of Statistics and Demography (ANSD) launched a national survey on financial inclusion in January of 2015. The survey is intended to investigate physical access to financial services, users of formal and informal services, financial needs of households, and more.
> Posted by Micol Pistelli, Social Performance Director, MIX
Customer retention is a key objective for any business, and microfinance institutions (MFIs) are no exception. Whether you are a shareholder, board member, CEO, or head of operations at a microfinance institution, your strategy must rely on retaining most of your clients that still need financial services. But what happens when many of your clients stop using your services? How do you determine whether they left because they no longer need financial services or because they prefer a competitor? How do you know whether they were dissatisfied with your customer service?
Answering these questions can be difficult. Some organizations conduct exit surveys over the phone or in-person through their customer service departments. However, due to the expense and time required to conduct such research, many MFIs are only able to reach a small number of clients, which may not be representative of the whole. Additionally, the quality of the data collected can be lacking due to inaccuracies because clients may not feel comfortable being candid with representatives of the MFI they are leaving.
Of the thousand-plus institutions reporting consumer protection data to MIX, 65 percent of them have set-up complaint mechanisms that offer some form of redress for clients, such as hotlines, call centers, or customer service representatives. However these feedback tools are functional only when clients proactively use them and when MFIs manage to gather data and solve issues in a timely fashion. What often happens is that MFIs are left with questions about their clients’ satisfaction and can only guess at the root causes for their drop-out.
> Posted by Center Staff
FI2020 Week is a global conversation on the key actions needed to advance financial inclusion, grounded in the findings of the recently launched FI2020 Progress Report. From November 2-6, 2015, stakeholders around the world are participating in more than 30 events and sharing their voices over social media, with #FI2020.
FI2020 Week is nearing its end! Today is the final day. We’re sad too, but there are still lots of opportunities to get involved, and it’s been a lively four days. Also, we’ll continue to report out on all that happened, so there’s more to come! Along with the in-person events, there are a handful of webinars today, you can submit a call to action, or take part in the far-reaching social media conversations, which we’re capturing on the FI2020 Week site, here.
Since our last recap there have been dozens of events around the world bringing together stakeholders passionate about advancing financial inclusion. Here is a quick look at a few of those events:
Nkosilathi Moyo, CEO, VisionFund Zambia
In Lusaka, Zambia, representatives from a variety of organizations, including the Bank of Zambia, came together at an event hosted by VisionFund Zambia to discuss promoting financial inclusion by leveraging savings groups and microfinance institutions. Participating stakeholders identified three major gaps for achieving financial inclusion in the country: lack of a conducive regulatory framework; poor infrastructure; and information asymmetry between different players in the market. Moving forward, the participants agreed on the importance of convening and decided that an FI2020 event should be held each year until 2020. Additionally, the participants agreed, there needs to be a stronger focus on establishing strategic partnerships between mobile network operators, financial service providers, NGOs, and government to develop cost-effective delivery channels that reach people in rural areas.
Forty-five leaders in financial capability, financial literacy, and financial health came together at a roundtable in Washington, D.C. to review a draft paper on innovations in financial capability written by the Center for Financial Inclusion in partnership with the JPMorgan Chase Foundation. The event was hosted by the Institute of International Finance. The draft paper focuses on seven principles to re-orient financial capability building toward customer needs and behaviors, with a call to action to all stakeholders—providers, governments, social sector organizations, financial capability providers, and donors—to make this shift.
> Posted by Center Staff
FI2020 Week is a global conversation on the key actions needed to advance financial inclusion, grounded in the findings of the recently launched FI2020 Progress Report. From November 2-6, 2015, stakeholders around the world are participating in more than 30 events and sharing their voices over social media, with #FI2020.
FI2020 Week is upon us! Around the world, interactive and participatory events are underway to explore the most important steps to achieving financial inclusion. The range of events features representatives from banks, insurance companies, payment companies, telecommunication companies, policymakers, regulators, NGOs, microfinance institutions, investors, financial inclusion support organizations, financial capability experts, and fintech companies. Across events and participants, FI2020 Week’s focus is the calls to action generated from the guiding prompt: What is an important action needed in your country (or industry segment) to advance financial inclusion?
Below are some of the first comments by financial inclusion leaders. But first, here are some ways you can participate.
Join one of the 12 webinars hosted by Accion’s Channels and Technology team, Andares, AVAL, GSMA, the Helix Institute, IFMR LEAD, Innovations for Poverty Action, LeapFrog Investments, MicroSave, MIX, and the World Savings and Retail Banking Institute.
Check out the findings from the web-based FI2020 Progress Report—and see our high-level summary of messages in this new 8-minute video.
> Posted by Center Staff
Next week, CFI will launch the first-ever FI2020 Week. From November 2-6, 2015, over 25 partners across the globe will organize conversations exploring the most important steps to achieving financial inclusion.
FI2020 Week will bring together diverse stakeholders to conduct interactive and participatory events, each of which will produce calls to action. The range of participants will include banks, insurance companies, payment companies, telecommunication companies, policymakers, regulators, NGOs, microfinance institutions, investors, financial inclusion support organizations, financial capability experts, and fintech companies, from around the world. All of these participants will focus on the question, “What is an important action needed in your country (or industry segment) to advance financial inclusion?”
We want YOU to join us! Throughout the week, many FI2020 Week partners will hold webinars – an opportunity for those who will not be attending in-person FI2020 Week events to participate in a variety of interesting conversations. The webinars cover a full range of topics, from client protection in mobile money use, to incorporating financial capability into product design. Check them out below and register now to join hundreds of people around the world in FI2020 Week.
And for more information, check out our Storify feed of social media and blog postings on the FI2020 Week website here and follow #FI2020 on Twitter for the latest updates.
Client Protection and Technology: The GSMA Code of Conduct for Mobile Money Providers
Hosted by: GSMA
Date: November 4, 2015
Time: 9:00 am – 10:00 am EST
This session will discuss how the GSMA – the global association for mobile network operators – is working with its members to ensure that mobile money services are safe, reliable, and secure, and that customers are treated fairly. The Code of Conduct for Mobile Money Providers includes eight high-level principles addressing topics such as safeguarding customer funds, AML/CFT, training and monitoring of staff and agents, reliable service provision, security, and fair treatment of customers. This session will provide a brief background to the Code of Conduct initiative and outline the plan for implementation of the Code. It will be useful for regulators, financial inclusion specialists, consumer protection advocates, and any other stakeholders who are interested in understanding what mobile operators are doing to ensure the safety, reliability, and fairness of mobile money services.
Register now!
> Posted by Joy Kim, Financial Inclusion Analyst, MIX
What’s better than reading about data? Visualizing it! Pardon us, then, as we offer a few words on CFI and MIX’s new FI2020 Inclusion Visualizer, a powerful tool to manipulate, visualize, and download images of data related to financial inclusion.
The Inclusion Visualizer, harnessing publicly available data from the World Bank, International Monetary Fund, Economist Intelligence Unit, and others, allows users to explore financial inclusion topics across country, region, and income levels. For the adventurous, users are able to customize the range of visualized categories and sub-categories. For example, do you want to know what percent of women with a primary school education or less have their own account at a financial institution? The Visualizer also offers targeted navigation options that focus on key areas, like the financial inclusion infrastructure, the policy environment, and technology.
How to Get the Most Out of the FI2020 Inclusion Visualizer
To get a better understanding of the landscape of financial inclusion around the globe, we suggest you begin by exploring Sections 1A through 1F. One particularly interesting section is Account Ownership (IC) because this metric is, perhaps, the simplest method for measuring financial access. Financial Inclusion Over Time (1B) illustrates changes not only in account ownership, but also with financial activities related to credit, savings, withdrawals, and deposits. As you’ll see, the world has seen growth in all of these activities with the exceptions of withdrawals and deposits, which implies that greater effort is needed on a global scale to increase usage of accounts.
Gail Buyske, Advisory Committee, Microfinance Information Infrastructure Project
> Posted by Center Staff
Several weeks ago we learned that MFT has suspended its operations. Moody’s has discontinued its Social Performance Assessment Program. The MIX is trying to increase revenue through its MixGold program. Should we care about these developments? What are they telling us about the state of microfinance’s information infrastructure?
The Center for Financial Inclusion undertook an analysis of these issues to follow up on Elisabeth Rhyne’s provocative blog of March 11, 2014, in which she argued that the microfinance industry needs an “infrastructure fix.” Today’s blog summaries the key issues, which will be discussed at a stakeholder discussion in DC on April 14, followed by one at a later date in Europe.
Let’s start by thinking about why we should care about microfinance’s information infrastructure. Information and its natural outcome, transparency, have been guiding principles of the microfinance industry practically since its inception. These are not just feel-good concepts: they played a fundamental role in the development of microfinance. Information and transparency were critical in microfinance’s early days in enabling donors and investors to identify promising MFIs that they could support. Readily available information enabled MFIs to benchmark their performance and set goals to improve their performance. And we can never forget that a commitment to transparency is a pact between MFIs and their clients.
> Posted by Andrew Fixler, Associate, CFI
Inclusive financial services in Africa are blooming. Between the turn of the millennium and 2011, the number of African MFIs reporting to the MIX increased from 58 to 397. From 2000 to 2014, the gross loan portfolio expanded over tenfold to $6 billion. Between 2003 and 2009, the number of borrowers served by MFIs in Africa increased from 1.6 million to 8.5 million. These numbers represent the development of an economic development tool for economies with very small financial sectors. It is impressive progress for an undeveloped industry beset by sparse human capital, problematic governance, and minimal external commercial interest.
AfriCap, which was the first private equity fund to invest exclusively in African microfinance institutions, and other microfinance investment vehicles (MIVs) funded by social investors have been a key growth factor through capitalizing MFIs and offering technical assistance and training. This interest is relatively new. The African MIV portfolio grew at an average annual rate of 36 percent between 2006 and 2013. This compares with an average growth of 38 percent for investments in the Latin America & Caribbean region since 2006, and 8 percent in both the Middle East & North Africa and South East Asia regions. The strong connection between MIV financing and microfinance sector growth was also noted in a World Bank paper, Benchmarking the Financial Performance, Growth, and Outreach of Greenfield Microfinance Institutions in Sub-Saharan Africa. The paper, released in 2014, explains the relevance of greenfield MFIs to effecting financial inclusion in undeveloped financial markets. These institutions are financed in large part by equity and debt from development finance institutions, as well as a now-significant cohort of MIVs.
> Posted by Jeffrey Riecke, Communications Associate, CFI
Rwanda has a lot to celebrate in terms of financial inclusion these days. Last week in Kigali the National Bank of Rwanda (NBR) hosted a conference in partnership with the World Bank, the African Development Bank, and the Alliance for Financial Inclusion (AFI) commemorating their 50-year anniversary. At the event, titled Financial Inclusion for Inclusive Growth and Sustainable Development, NBR Governor John Rwangombwa highlighted the country’s recent rise in access levels, from 48 to 72 percent between 2008 and 2012 across formal and informal providers. Rwanda now has the laudable goal of increasing this figure to 90 percent by 2020. To help it get there, on Friday the World Bank launched a $2.25 million program supporting key financial inclusion areas for the country.
Along with overall exclusion rates dropping from 52 to 28 percent over 2008 to 2012, formal services access increased from 21 to 42 percent during the same period, according to the 2012 FinScope Rwanda Survey. The new government goal of 90 percent access by 2020 is an extension of the country’s Maya Declaration Commitment of 80 percent access by 2017. Rwanda’s growth in formal access can be attributed to products offered by both banks and non-bank providers, like the country’s community savings and credit cooperatives known as Umurenge SACCOs. Over the past three years, Umurenge SACCOs have attracted over 1.6 million customers. Ninety percent of Rwandans live within a 5 km radius of one of the cooperatives. Countrywide, the number of MFIs, including Umurenge SACCOs, increased from 125 to 491 between 2008 and December 2013. Elsewhere in the sector, over the last three years, the number of banks increased from 10 to 14, the number of insurance companies increased from 9 to 13, and the number of pension providers increased from 41 to 56.
> Posted by Sonja E. Kelly and Veronica Trujillo, Fellow and Consultant, CFI and MIF/IDB
Where can you find up-to-date and comparable information on the state of microfinance and financial inclusion? Which are the most trusted sources? These issues were recently explored in a research effort designed to lay the groundwork for broadening the scope of the EIU Global Microscope on the Business Environment for Microfinance from an emphasis on microfinance to financial inclusion. As part of this process, Fusion Research conducted a detailed assessment on the relevance of the Microscope.
As sponsors of the Microscope, what we found through the study was a pleasant surprise. Seventy-nine percent of people surveyed (more than 500 microfinance sector stakeholders from different countries around the world, with a high proportion of participants coming from Latin America and the Caribbean) were at least aware of the Microscope, and most of these people have used or consulted it. Closely trailing the Microscope, 76 percent of people surveyed were aware of the MIX Country and MFI Benchmark Reports.
Market Analysis of Microfinance Resources
In terms of actual use of the tools, the MIX leads the way, almost tied with the Microscope. When we look at use of the tools by stakeholder type, we see a greater diversity in which tools different kinds of people use.
Investors are most and equally likely to use the EIU Country Reports and the Microscope. Their need to know the country microfinance context and level of market development to make better decisions is likely to explain such preference. Those who work for financial services entities seem to like the detail and competition data that the MIX provides. Their second most used source is the Microscope, revealing the importance for them of country regulatory and operative environment. Foundations appear to use the Microscope and MIX data in tandem. The Global Findex (The World Bank Global Financial Inclusion Index) is most used by regulators/policymakers and DFIs/foundations, while academics, think tanks, and those working in business or consulting are most likely to use the Global Microscope.
Respondents to the survey, on average, reported using between three and four resources in their work. In terms of usefulness, MIX reports and the Global Microscope on Microfinance were rated as very useful for more than 55 percent of the people interviewed.
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